Boston-area's hotel market continues boom in 2008

Steve Adams

Monday

Jan 28, 2008 at 12:01 AMJan 28, 2008 at 7:16 PM

Strong tourism and business traveler markets have buoyed the hotel industry in Greater Boston in recent years, and nightly rates are expected to keep growing in 2008 barring a sudden economic slowdown.

Strong tourism and business traveler markets have buoyed the hotel industry in Greater Boston in recent years, and nightly rates are expected to keep growing in 2008 barring a sudden economic slowdown.

Boston is the nation’s fourth priciest hotel market, according to research by Boston-based hospitality consultancy Pinnacle Advisory Group. The company predicts that increased conference activity will boost reservations in Boston and the suburbs in 2008.

Although there’s a healthy market for construction of new hotels and renovation projects, the new supply might not keep pace with increasing demand generated by rising convention and meeting business in Boston.

The Massachusetts Convention Center Authority expects to see nearly one million visitors at the city’s two major meeting facilities, the Boston Convention & Exhibition Center in South Boston and the Hynes Convention Center in the Back Bay. Overall attendance is expected to rise 13.8 percent over 2007.

Meeting attendees are expected to book approximately 620,000 hotel room nights, up 3 percent from 2007.

That could keep room rates drifting upward during 2008. Pinnacle predicts the occupancy rate at suburban Boston hotels will increase 1.6 percent to 63 percent in 2008, while average room rates rise 5 percent to $112.

Robert Galligan, innkeeper of Quincy’s Best Western Adams Inn, said his room rates start at $109 a night but could rise close to $300 during the peak travel season from May through October.

The hotel, located six miles south of the convention center in South Boston, has benefited from spillover demand for rooms when downtown properties are booked for large events such as last year’s Bio International convention that attracted more than 22,000 attendees to the BCEC, Galligan said.

‘‘We don’t get as many senior executives. We get the middle management,’’ Galligan said. ‘‘If the convention center fills up the downtown, the person needs to migrate this way if he needs rooms.’’

This year’s biggest BCEC event is the AIIM & On Demand conference in March, with 35,000 attendees.

The weakness of the dollar continues to attract tourists from Europe and Canada who have an eye on shopping trips, Galligan said.

The Boston Marriott Quincy has seen increased business from Boston conventions and individual business travelers, spokeswoman Lucy Slosser said.

‘‘There was a lot of local South Shore business demand,’’ Slosser said.

Another factor benefiting the hotel industry could be demand from movie crews shooting films in the Boston area, Arrants said. At least four major studio motion pictures are expected to be filmed in the area this spring.

Hotels are investing in renovations and other upgrades to keep pace with newer rivals.

For example, the Best Western Adams Inn completed a $2 million expansion and renovation last year. The Boston Marriott Quincy, which opened in 2001, undertook a series of upgrades last year. It installed additional computers in its business center and 37-inch LCD TVs in all 460 guest rooms.

‘‘More and more guests are expecting a really high level of technology,’’ Slosser said.

Within weeks, the hotel will begin renovating all 15,000 square feet of meeting space. It’s also adding additional shuttle bus trips to MBTA stations, the Logan Express bus and Braintree’s South Shore Plaza.

Chris Gistis, CEO of Hanover-based Linchris Hotel Corp., is skeptical whether hotels can sustain the recent growth in 2008 given the increasing likelihood of a recession.

‘‘I don’t think we’re going to see our occupancies decline. But we’re not going to see the kind of increases we’ve seen in the last few years,’’ Gistis said. ‘‘We’ve been spoiled the last few years, and that kind of exceptional run in business had to come to a stop eventually.’’

NEW HOTELS IN BOSTON

The following list includes some high-profile hotels in Boston that opened recently or are about to open.

Liberty Hotel: The $150 million, 300-room hotel opened on the site of the former Charles Street Jail at the edge of Beacon Hill in September.
InterContinental Boston: The $310 million, 424-room hotel opened on the Fort Point Channel in November 2006.
Westin Boston Waterfront: The $204 million, 793-room hotel opened next to the Boston Convention & Exhibition Center off Summer Street in South Boston in June 2006.
Regent Boston: The 150-room hotel is opening at Battery Wharf this spring off Commercial Street near the North End. The project will also include 103 condo units.
Renaissance Boston Waterfront: The 471-room hotel is slated to open next month off Northern Avenue on the South Boston waterfront.
Mandarin Oriental: The $200 million, 148-room hotel is slated to be completed in July next to the Prudential Center in the Back Bay. The project also includes 40 condos and 48 rental units.

Source: Greater Boston Convention & Visitors Bureau

HOTEL RENOVATIONS

This list includes hotels in Greater Boston where renovation projects have been launched or completed in the past year.

The Copley Square Hotel in the Back Bay
The Hyatt Harborside in East Boston
The Colonnade Hotel in the Back Bay
Ritz-Carlton Hotel on the Boston Common
The Royal Sonesta Hotel in Cambridge
The Kendall Hotel in Cambridge
Boston Marriott hotels in Quincy, the Back Bay, Newton and the Theater District
Best Western Adams Inn in Quincy

Source: Greater Boston Convention & Visitors Bureau

Steve Adams may be reached at sadams@ledger.com.

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